Bureau Warns Mortgage Lenders Against SSDI Discrimination
November 24, 2014
The CFPB put out a bulletin last week advising lenders not to create illegal hurdles for recipients of Social Security Disability Income who apply for mortgages, warning that requiring unnecessary documentation from such consumers could raise fair lending risk. The new bulletin discusses standards and guidelines on verification of SSDI, including those under the CFPB’s ability-to-repay rule, the Department of Housing and Urban Development’s standards for FHA loans, the Department of Veterans Affairs’ standards for VA-guaranteed loans, and guidelines from Fannie Mae and Freddie Mac. The bureau begins by noting that to verify income for qualified mortgage debt-to-income ratios under the ability-to-repay rule, lenders are required to look at whether the Social Security Administration benefit verification letter or equivalent document ...